U.S. announces effort to combat Medicare fraud

WASHINGTON — The Obama administration on Wednesday unveiled an anti-health care-fraud mission aiming to combat billions of dollars in Medicare scams from Miami to Los Angeles.

The joint effort by the Justice Department and the Department of Health and Human Services will bolster Medicare-fraud strike forces in those coastal cities as well as establish new ones in Detroit and Houston, where suspicious billing schemes have spread, senior officials said.

The new task force also will strive to share intelligence and other "real-time" data to stop the criminal activity from taking root in these and other cities, a problem that's plagued the taxpayer-funded program for the elderly, the indigent and people with disabilities.

Attorney General Eric Holder stressed that the fight against Medicare and Medicaid fraud — estimated to be at least $60 billion a year — must accompany the administration's greater ambitions to reform health care, a monumental political challenge.

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"By all accounts, every year we lose tens of billions of dollars in Medicare and Medicaid funds to fraud," said Holder, who outlined the new initiative with HHS Secretary Kathleen Sebelius at a news conference.

"Those billions of dollars represent health care dollars that could be spent on medicine, elder care or emergency room visits, but instead are wasted on greed," he said.

The task force, dubbed the Health Care Fraud Prevention and Enforcement Team, would be run from the highest levels of government.

"It isn't something we're leaving to the staff," Sebelius said. "For the first time ever, at the Cabinet level, the attorney general and I are personally committed to making sure this effort is a success."

The announcement comes as President Barack Obama and major health care industry leaders have vowed to slash $2 trillion in health care costs over the next 10 years. Top members of Congress have said repeatedly that reducing costs — including Medicare fraud — is the only realistic way to find funds to help cover the 45 million uninsured Americans.

The plan announced Wednesday includes a recommendation by the Obama administration to invest $311 million in the fiscal 2010 budget to fight fraud, waste and abuse in the Medicare program, a 50 percent increase over this year. During the Bush administration, Congress committed scant new funds to combat fraud.

Medicare, which was adopted by Congress in 1965, suffers from lax oversight of fraudulent claims submitted by health care providers who have come up with sophisticated ways to exploit the vulnerable system.

During the past year, The Miami Herald published a series of stories showing how Medicare and its government contractors seem bent on paying claims quickly without verifying them.

Miami-Dade County, considered the capital of Medicare fraud, has been overwhelmed by scams involving medical equipment supplies, HIV infusion therapy and health care for homebound diabetic patients. The fraud in Miami-Dade is at least $2.5 billion a year, according to the FBI and the U.S. Attorney's Office in Miami, but that's considered a conservative estimate.

In March 2007, the Justice Department and HHS launched the first Medicare-fraud strike force, in South Florida. Over two years, prosecutors filed 87 indictments charging 159 defendants with fraud offenses. Among the defendants: medical equipment operators, HIV clinic owners and physicians. Many of the conspiracies entailed stolen Medicare-identification numbers, falsified prescriptions and kickbacks to patients.

"Medicare fraud is out of control . . . especially in my home state of Florida," said Republican Sen. Mel Martinez. "Now Congress needs to act to provide the tools necessary to better identify fraud early and stem the tide of fraud that DOJ and other law enforcement agencies must later investigate and prosecute."

This month, Martinez introduced legislation that would create Medicare-fraud prevention and detection systems, including protecting seniors and doctors from identity theft as well as keeping criminals from becoming Medicare providers.

R. Alexander Acosta, the U.S. attorney in Miami, told the Senate Special Committee on Aging last month that he started focusing on fraud because he was "absolutely disgusted" by the level of scams in South Florida but that prosecutions aren't the solution.

"With additional resources my office could easily double or triple prosecutions . . . but the best way by far to prevent fraud in the first place is to improve the rules of the road," Acosta said, calling on Medicare "to ensure rapid payment, yet at the same time identify and deny fraudulent bills."

Sebelius said that HHS would work on simplifying billing with improved technology as part of the effort to prevent fraud.

She noted that in several regions, investigators in the HHS's Office of Inspector General are using "state-of-the-art, cutting-edge technology to identify and analyze potential fraud."

"Other federal law-enforcement officials and our strike forces are completing in a matter of days analysis that previously took months and sometimes years to analyze with the traditional investigating tools," she said.

AARP, the nonprofit advocacy group for people 50 and older, praised the Obama administration's stepped-up fight against Medicare fraud.

"We simply cannot afford to pay for care that is never delivered and equipment that is not needed," AARP executive vice president Nancy LeaMond said.